Shares of Herbalife (NYSE: HLF) plunged as much as 4.5 percent Tuesday morning following a negative write-up from the Fraud Files blog. Although shares have bounced above the $49 level, the stock remains under pressure, now down about 1.4 percent to $49.91.

Blogger Tracy Coenen compared Herbalife to FTC-proven pyramid scheme BurnLounge, a multilevel marketer focused on online music which was shut down in 2007. Some of the likenesses include:

similarly-priced product packages which are to be sold by distributors involved in the marketing;

a compensation program which seems to focus on recruiting rather than the sale of actual, physical products; and

the fact that "most recruits lose money in Herbalife."

Coenen also noted a recent ruling in a Belgian court which showed Herbalife is a pyramid scheme. The court found the company's business is centered around "endless recruiting."

Recall a decline in Herbalife shares from over $70 at the end of April to under $43 by mid-May as hedge-fund manager and known short seller David Einhorn probed execs on the company's Q1 conference call. While Einhorn has still not revealed any position on Herbalife, his comments then seemed to speculate on just what Coenen is implying here. Just this morning, Einhorn discussed several recent trades on CNBC, but said he is "not saying anything on Herbalife."